Morning everybody. Welcome to Cantor's Global Healthcare Conference, day one. I am Kristen Kluska, one of the analysts at Cantor. Very happy to have the Abeona Therapeutics team with me. We have Dr. Vish Seshadri, the CEO, and Dr. Madhav Vasanthavada, the CCO. Thank you both so much for being here today.
Always a pleasure. Thank you, Kristen.
So maybe to start our conversation off, do you mind just providing us with a high-level overview of the company?
Absolutely. Abeona, as you know, is a commercial stage cell and gene therapy company. We are pioneering medicines for the highest unmet needs, and our flagship product is ZEVASKYN, which launched late last year, in a disease called recessive dystrophic epidermolysis bullosa. Patients with a lot of chronic wounds that lead to complications, and they do not have normal lives. And ours is the only autologous cell therapy that addresses the gene deficiency. And the launch is well underway. Other than ZEVASKYN, we also have our partnered programs with Ultragenyx, and Taysha Gene Therapies, and Beacon Therapeutics. And we have an early-stage preclinical asset in the PSMA prostate cancer space that is going into clinic next year. So many, many exciting catalysts on the way.
Okay, thanks. Maybe we can kick it off with talking more about the ZEVASKYN launch. You have boarded seven QTCs to date. What is the geographical footprint? Are these centers that have higher traffic of RDEB patients to begin with? Why were they ultimately selected?
Yeah. We have seven qualified centers. Most recently, we activated Cincinnati Children's, which is one of the largest EB centers in the U.S., also very well recognized globally. We have a wide footprint geographically from the west to the east. Can you hear me okay?
Yeah.
Starting from California and the West Coast, we have the Colorado, Chicago area, Texas, the East Coast. These are all very well-known centers. It is important that we activate onboard centers that are well respected and trusted by these patients because this is a patient community that requires lots of handling and comorbidities, complications, GI dilatation, pain management, infection management. Onboarding these well-known centers is going to help us with, now that they are active with patient identification and moving them through the process. There are additional centers that are interested in bringing ZEVASKYN onto those centers also.
Okay, great. How do patients become matched with specific QTCs that they are ultimately going to work with to get the ZEVASKYN treatment? Is this based on proximity, when they are available? On that note, do you plan to add more centers in the future?
Yeah. We don't match a patient to a center. That's typically done either based on patient's own preference, where they're comfortable going with, or the relationship that the referring doctor has got with one center versus the other. Sometimes we have seen insurance companies actually dictate, because it depends on the payer plan of that patient, if the center is in-network or out-of-network, that also helps guide as to what's the right center to go. Like I said, I think we do have centers that clearly want to bring ZEVASKYN on board, and that's only going to further expand our geographic footprint and minimize the travel burden for these patients.
Okay. What are the top areas of excitement that patients are bringing up during this process, and where are they showing the most hesitation?
The area that's most exciting to these patients is the fact that they have a treatment option that can provide long-term durable benefit by healing their wounds, reducing pain. The fact that they don't have to spend many hours in bandage dressing changes, they can live their life. This is huge for these people. There is a very high unmet need, even though we have multiple therapeutic options. Of course, we know that this is a surgical application, and patients are hesitant. Hesitant in the sense they want to know what the process entails. That also depends on the age. You've got young adults and adults who have spent their life going through many complicated procedures, so they kind of know what to expect. But then you have other younger or parents who want to know what involves.
We've actually helped bridge that or mitigate that by putting these patients or prospective patients in touch with people who have gone through our clinical trials. We have a group of patients called Strong Together Network. These are patients who have received ZEVASKYN not just once, but twice because they have seen the benefit. By helping bridge make those connections, that's really helping prospective patients understand what to expect.
Thank you. Have coverage and reimbursement timelines, processes improved over time as you have added more states into the mix with the QTCs?
Reimbursement coverage and reimbursement timeline is still, I would say, our biggest sort of bottleneck. It takes time, and it is expected. ZEVASKYN is a high-cost gene therapy. Insurance company wants to make sure that the medical necessity is established, and the product is covered. The good news is that we have a really robust coverage, with more than 95% of commercial lives that are covered by ZEVASKYN. We have Medicaid, all 51 Medicaid jurisdictions are covering ZEVASKYN baseline. We recently received a New Technology Add-on Payment that CMS issued, which really shows the value that payers sort of acknowledge. We have not received any ultimate denial of ZEVASKYN to none of the patients who have applied. That is the good news.
We know that it takes time, especially, not just for the product, but the procedure, because there is a biopsy that is required, there is a surgery, there is an inpatient stay in the hospital. These are the procedural parts where the center and the payer have to negotiate, oftentimes, a single case rate, like the payment rates. Those things have to be negotiated. On top of it, if you have a patient that is traveling from out of state, that adds on for the physician and the institution to get enrolled in out-of-state programs. These are some of the things, and as we are adding more states into the mix, that actually helps because now we have about 40% of our total addressable patient pool are in the states where you have a QTC.
We believe that that is going to help accelerate it, at least minimize the out-of-state and cross-border enrollment process that needs to take place.
Bless you. I understand that each center is unique, of course, but once scale is reached, how should we be thinking about the capacity that each center can take on of patients in the pipeline, how many they can ultimately screen, biopsy, treat, et cetera?
Yeah. This is something based on the feedback we've been receiving from the centers. They can handle easily one to two patients per month. That's what we've been told, and we are going to verify this as we continue to scale because we are bringing more centers on board and we want to understand what the capacity constraints are in each of the centers. At the early stage of launch, I think what we want to caution against is by trying to model per site capacity and extrapolate that. Now you've got seven centers. If we add on more centers, that doesn't necessarily scale, right? Especially in the early stage of launch for all the reasons that I mentioned earlier. It's highly variable.
The time, and it's hard to predict right now because it really depends on all the factors involved in patient identification and financial clearance and things of that nature. That's really where we are anchored on is making sure we are doing the right things, the fundamentals right, by expanding our site footprint. We have now ensured market access, and as patients continue to flow through the system and as more patients get treated, that's going to help lead into a growth trajectory.
Okay. Can you help us to further understand by maybe giving us an example of what a patient's journey might look like? I understand they're not all the same, but what are the key steps that they're going through during this process?
Yeah, almost invariably there is a patient consultation that takes place. You may have a patient that belongs to a qualified center. Belongs, meaning they already are familiar with the treating physician, or you may have a patient that's out in the community that needs to get referred. In either case, there is typically a patient consultation, and once the patient has been broached with ZEVASKYN, then the patients need to spend some time in understanding this is the right next step. Once that's done, then you're talking about prior authorization, which is often a clinical prior auth step. Once that is secured, then we go into financial arrangements and the case agreements that take place between the center and the payer, followed by which you schedule for a biopsy.
Once a biopsy is taken, biopsy is often taken using at the qualified center, then it's a 25-day manufacturing process, and after that, the product is applied onto the patient when revenue is recognized at that point in time. Somewhere between these steps is also the need to make sure that the patient is clinically worked up, in terms of their fit to undergo the process. That could also be oftentimes an aspect and a variable, making sure that their hemoglobins, that the wound infection management, antibiotic prophylactically, things of that nature, so that the surgery happens smoothly. These are the big steps that take place.
Okay. In addition to all the clinical trial experience, you've now treated roughly a dozen patients-
Yeah
in the commercial setting. Curious if there's been similarities or trends amongst the patient profiles that were kind of the first at-bat in the commercial world and whether you expect to see more expansion just in terms of patient profiles, characteristics, now that you're a little bit longer into this process.
Yeah. So yeah, a dozen patients treated and in our clinical trials, the age was six years was the youngest that we had treated as part of VIITAL. We already seen that age expand. Now we have treated a two-year-old, our youngest patient, and so that's just profound. Think about applying surgically on a two-year-old. So that actually is going to help instill more confidence among other physicians who are also having younger patients. We've got all the way to 24 years of age that we've treated, up until as we announced on our first quarter call, only Lurie Children's and Stanford was treating, and now, on our August 13th call, we announced that UTMB had biopsied and CHOP also has treated. So we are seeing that more and more centers are now beginning to treat.
We've got three more treatment centers that hopefully will treat by the end of the year. We'll see. But I think as this experience scales, we are seeing that patients are traveling from out of state, so more people that are traveling, and we have Abeona Assist, which is a travel support program that works with these patients and making sure that those logistics are taken care of. So we see that that pool should expand and especially parents get more comfortable once they start seeing the benefit of this.
Okay. Understand that two of the patients didn't end up getting the full treatment, which we're going to brief on in a second. But overall, what has been the success rate of feedback from these dozen or so patients that have been treated commercially? Any reports that you're hearing about wound healing, pain reduction?
Yeah. So the feedback, we were at debra Care Conference recently where physicians actually showed on slides the outcomes of the recently treated wounds, especially one in the ankle area, and that had the stopping power. There were a lot of people taking pictures of the pictures that were shown, and that's good to see. I know we are still early. I just want to. As [Karsh] said, we've only treated 12 patients and it takes six months, was usually the endpoint that was studied in VIITAL. So as these wound healings continue, and this feedback comes through, I think that should help. Plus also we've seen physicians, KOLs, key opinion leaders, speak from the stage about ZEVASKYN in a manner that they had not even spoken like last year. Last year, around this time, you would hear oftentimes about the procedural burden and the complexity.
But now you've got wounds that are healing, so you've got physicians also talking about ZEVASKYN, which is a plus point. Then we connected a lot of patients who came to our booth, Abeona booth. We were able to put them in touch with members of our Strong Together Network. I think these are the types of things that fundamentally, as they get more comfortable with the process, we believe that should help with the-
In fact, one KOL said that if these grafts take, you may be good for life. That's something big coming out of that community.
Yeah. I actually had the opportunity last year to meet one of the patients, and it was really cool to translate what I've seen in your corporate decks, the pictures, to seeing and hearing it in person. So congrats on all the success you've had so far.
Right. Exactly those clinical trial patients, now we have published five years of follow-up after phase III study, wound healing. We've had the first patient that was treated, now we've got 12 years of follow-up after a one-time surgical application. So we know that, of course, this is really the data that we are pooling and gathering, and that should inspire.
Let's talk about two of the patients that you disclosed on the last call. One had a low manufacturing yield, and one didn't meet lot release specifications. Should we expect these instances could occur over time, or are there ways that you're looking to potentially mitigate this risk?
Sure. I'll address that question, Kristen. When we are trying to model what is the proportion of manufacturing attempts or runs that may end up with a, let's say, non-revenue generating batch, so to speak, because it's non-revenue generating, but it's not that there's no clinical value for the patient. Even the low yield three sheets, they were passing all the specs and
Yeah
the patient did get the treatment. In the case of the out-of-spec, it was an identity assay where we did not have any experience in clinical trials in setting what should be that threshold. It's not that we had a potency problem or a safety problem with the batch. In fact, that patient got double-digit number of sheets. I don't know the exact number, 11 or 12, whatever that is. I just wanted to underscore why it is difficult to predict those proportions when you did not have that in clinical trials. I would just demarcate those two instances by saying low yield batches are generally rare. Despite having a three sheet batch, our average is around nine. You can imagine that many batches are in the double-digit area.
That is because we are building in a lot of. There is natural attrition when you have a manufacturing process going on. There can be cellular yield, how much starting material you have, and then, of course, you can have certain sheets that have to be discarded, either due to a false positive hit or some kind of assembly issue. What we do is we start with a very high number so that attrition is buffered and accounted for. Occasionally, what we find is that starting number of cells itself is going to be a low number, and that is something we've already worked on addressing. What could be the factors that influence, whether it's the way the biopsy was done or the location in the body that we took a biopsy? Is that causing a lower cellular yield?
And those types of things are continuous improvements that we're making to our process. The short answer is that with any autologous cell therapy, you've seen the CAR T world, out-of-spec is not a new topic at all.
It's just that we have to learn and be nimble in plugging every hole that we identify.
Okay. So what manufacturing is Abeona able to support per month or per quarter, and how may this change in the future? If you do decide to change in the future, what sign-offs or steps need to happen?
We are currently manufacturing, we have slots, six a month is our going rate per month. We are actively working on expanding the second suite, where currently we have vector manufacturing going on. That process is well underway. So we'll have that suite that can support, add another four slots. What we have not done is fully put operators to keep that going, but that's something that we will build as our demand builds. We're thoughtful in how we pace our spend because we are now laying the foundations. With each, let's say every site has a patient treatment experience already in their hands. Then we're thinking of how we ramp it up to 10 a month at some point in 2027.
Okay. Everything we talked about, how should investors be thinking about cadence in the near to midterm? Is this going to be a launch where you think it will be continuous and lead to steady stream revenues or one that is ultimately going to peak?
Yeah, I would say near to midterm we should expect the cadence to build quarter- over- quarter. This is a steady growth. As we have more centers begin to start treating patients, we have laid the right foundation with patient access and the clinical conviction that is building. That is really how we anticipate this to climb up. In the longer term, clearly, as patients enter into the funnel based on the positive experience, that certainly will help to accelerate. Plus, we are also very much focused on the hand contractures, which is something we have been evaluating because there is a high level of interest from literally all stakeholders, whether it is patient advocacy groups or the physicians. So we are exploring that also. That is going to take some time, of course, to figure out what is the fastest pathway, but we want to bring it to the patients there.
And Kristen, since you said near to midterm, I would say for this year, we are focused on the foundational steps, which is as many sites to get patient treatment experience as possible. Second, we continue to activate as many sites as we can. These are all the foundational building blocks that are essential this year. We are growing quarter over quarter. We are trying to build that patient cadence, and that will come naturally as a result because when these sites have their first patient experiences and they see what outcome they are getting, there is going to be an internal catalyst for them, and that is really what we are focused on at this stage.
Okay. When we think about the TAM, there are a couple things we really need to consider here. The number of patients, the number of potential cycles needed, and the types of patients with RDEB that might be good candidates in general for ZEVASKYN. So how are you thinking about the total number out there?
Yeah. As we mentioned some time ago, it is always the same. It is 1,300 is the dystrophic EB patient pool that we have found based on our claims analysis. 750 patients are phenotypically, they have the large chronic wounds that we believe are ZEVASKYN-eligible candidates. Based on the extent of wounded area that they have, we believe that majority of these patients are going to require about two treatment cycles with ZEVASKYN. Because with each treatment with ZEVASKYN, we can produce up to nearly 500 centimeters square, and these patients on average have about 1,000 centimeters square of wounded areas. So two treatment cycles, given our price point, $3.1 million, we are talking about north of $4 billion total addressable market opportunity here in the U.S.
Yeah. Okay, thanks. Moving on to the pipeline. I got to say, your pipeline, I think, is very undervalued and actually makes a good chunk of our DCF model. It is something people certainly should be paying attention to, especially because one of them has a PDUFA next week. How are you thinking about the potential of near-term revenue streams through the royalties of these programs?
Yeah, and as you know, we do not have R&D spend or-
Yeah
We are not operating on those programs, but we are excited. We are looking forward to the UX111 PDUFA date, and this is a very high unmet need area as well. From that relationship, we do have royalties that go up to 8% in a tiered way and also some sales milestones. In addition to that, we also have the relationship with Taysha Gene Therapies in Rett syndrome, which is, from an epi perspective, that is a larger market. But it is a little further away. But we are hearing that the progress is very encouraging. We do have, of course, to share some of those earnings from that with our licensors. So that is there. Then the Beacon Therapeutics deal that we did up to five targets, which has, again, milestones as well as royalties. So exciting partnered programs there.
Then, of course, never to forget our own autologous SIR-T program, which is coming to the clinic next year. It's another exciting area because, as you know, prostate cancer is a very high unmet need problem.
Well, we have our figures crossed for UX111. The data was really strong there, and again, a patient community that has just waited far too long for treatment. So we're rooting for them, and we're hoping for a positive outcome next week. On your PSMA program for advanced prostate cancer, can you tell us a little bit more about this program? Is the target already de-risked? How might this process in particular allow for more durability and better safety?
Yeah. So prostate-specific membrane antigen, the PSMA, is a validated target in prostate cancer. Almost all patients have some expression of PSMA, which is evident with how well some of the first assets that have come to market have done. PLUVICTO, for example, is a radiolabel carrying antibody that targets PSMA and is already a billion-dollar trend in sales. That just goes to show how much of residual unmet need is there. Even with these initial wave of agents that target PSMA, we still have much more to do in this space. That's where our program comes in, because CAR Ts traditionally have not been successful in solid tumors as they have been in some of the hematological cancers.
We really studied what are the reasons for those, or potential reasons, and addressed all of that in designing what type of asset do we need in empowering T cells to go after prostate cancer. That's really what our SIR-T program is. The types of elements of science that we're addressing are things like the affinity tuning of how does our CAR T or SIR-T bind to the target cells? How do we minimize the off-target toxicities, which have been a limitation in this type of a therapy, and that increases the therapeutic window? Really, how do we create persistent serial killers out of these T cells that can substantially dent the tumor and keep it that way? So that's really what's engineered into these cells, and we're excited to bring this to clinic.
Okay. So maybe two questions to close. First, what do you think is the most misunderstood or undervalued component to Abeona's valuation, and why should investors look at the company now?
I think one of the biggest learnings that we've had, coming from the ZEVASKYN launch, is that we have to think in a non-traditional sense here. The speed of the launch does not have an implication to the peak of the launch. This has to be decoupled. The reason for that is because a launch of this nature, which is very unique in an ultra-rare population, you have a complex biologic drug which has an 84-hour shelf life. The number of things that need to align, we are working on those types of foundational. It's not like you have streets and you have rail tracks, and you need a completely different system.
It's going to take its time to reach that, but this is why we believe that the Street has not valued our ZEVASKYN potential appropriately. I think that's where the gap is, and there's opportunity.
Okay. Then would love to turn the floor to you. Anything that our audience should take away that I didn't ask you today?
I think we covered most of it. I think this is a very exciting time and a catalytic year, I would say, 2026 and going into early 2027, where we have set up all the fundamentals to give this launch the best launchpad, so to speak. We are excited by how many sites are getting onboarded with us and gaining treatment experience. There is going to be more and more of these outcomes from patients being discussed in the RDEB community and these conferences. We are really going to be talking a lot more about that in the coming months and into next year. Stay tuned for these events.
I will just say that the unmet need. What we are hearing from patients and the testimonials, the unmet need is high. Even in the competitive landscape. If you look at the number of treatments coming out, there are not too many that can talk about addressing the type of solutions that ZEVASKYN is looking to offer. We are just doing the right things and we believe that is really going to shape into results, more than what we are currently seeing.
Yeah. Kudos to your team because I think you really went above and beyond really to just understand the patients, their asks, their needs. Again, the event that I got to go to, it was very clear that you are a great source and somebody easy for them to talk to. Congrats. We are always rooting for you. Wishing you the best for this continued launch. Thank you so much for being here.
Thank you.
Thank you.